Prudent Monetary Policy and Prediction of the Output Gap.
Risk-adjusted LQG optimal control with perfect and imperfect observation of the economy is used to obtain prudent Taylor rules for monetary policies and cautious Kalman filters. A prudent central bank adjusts the nominal interest rate more aggressively to changes in the inflation gap, especially if...
| Main Author: | |
|---|---|
| Format: | Journal article |
| Language: | English |
| Published: |
Elsevier
2009
|